Creating Value Where Others
Don’t Know to Look.

A medical office building (MOB) is a commercial building designed and built primarily for physician practices and outpatient clinical services. The investment case for MOBs rests on several durable characteristics: physician tenants invest substantially in clinical buildouts — specialized plumbing, electrical, and procedure-specific infrastructure — making relocation expensive and driving tenant retention significantly higher than conventional office. Healthcare demand is largely inelastic, meaning patient visit volume is driven by medical need rather than economic conditions, providing income stability across market cycles. Favorable demographic trends — an aging population requiring more outpatient care — support long-term clinical space demand. These factors have made MOBs one of the most consistently in-demand net-lease investment categories in commercial real estate.

Off-market MOB acquisition opportunities are sourced through direct relationships with physician owners, health systems, developers, and property owners who are considering disposition but have not engaged a broker or publicly listed the asset. These opportunities require healthcare-specific networks — physicians are not traditional real estate sellers and do not typically respond to cold outreach from general commercial brokers. Our platform’s relationships with physician practices, developed through our Advisory and Real Estate teams, produce a continuous pipeline of sale-leaseback opportunities and owner-occupied MOB dispositions before they reach the market. For investors seeking assets unavailable through CoStar or broker networks, our off-market deal flow is a primary source of differentiated acquisition opportunities.

MOB acquisition due diligence covers both standard commercial real estate review and clinical-specific analysis. Standard review includes title search and insurance, Phase I environmental assessment, property condition assessment, survey, zoning confirmation, and review of all existing leases, service contracts, and pending litigation. Clinical due diligence — which most commercial advisors do not perform — includes evaluation of physician tenant practice quality, specialty demand sustainability in the submarket, payer mix analysis, physician succession risk, clinical equipment and infrastructure assessment, and competitive supply analysis. We perform clinical due diligence as a standard component of every acquisition advisory engagement, giving buyers visibility into the tenant risk factors that determine long-term NOI stability.

MOB acquisitions can be financed through several channels: conventional commercial mortgage loans from national or regional banks, typically at 65 to 75 percent loan-to-value with 5 to 10 year fixed terms; SBA 504 loans for owner-occupied medical facilities, which allow up to 90 percent financing for physician-occupants; CMBS (commercial mortgage-backed securities) loans for larger, stabilized assets; bridge loans for value-add or transitional assets requiring repositioning before permanent financing; and life insurance company loans for long-term, stabilized NNN assets. Interest rates, amortization periods, and lender appetite vary by asset quality, occupancy, tenant credit, and overall market conditions. We work with healthcare-focused lenders across all of these categories and can help structure the appropriate financing for each acquisition.

Hold period depends on the investment strategy and asset type, but most MOB acquisitions target 5 to 10 year holds. Value-add acquisitions — buildings purchased at higher cap rates with occupancy or lease term issues to be resolved — may target shorter holds of 3 to 5 years once value creation is achieved. Core stabilized acquisitions with long-term NNN leases may be held longer as income-generating assets. Development co-investments through the Physicians Fund target hold periods aligned with the stabilized lease-up period, typically 7 to 12 years from development completion. Exit timing is influenced by capital market conditions, cap rate trends, tenant lease term remaining, and the overall portfolio strategy of the investment vehicle holding the asset.